Where would we be without economic researchers to tell us the price of things without context? Probably happier.

If you didn’t know what the average car cost and I try and sell you a Honda for $100,000, you might believe it’s worth it. If you learn most people drive a Honda costing around $20,000, then you know I’m overcharging you for it. See? Context clears everything up and let’s us price things according to the market place. That’s how market-based economies work, and when properly regulated, they work pretty well. (Sorry, some regulation is necessary, because companies throughout time, from Standard Oil to Enron, have proven time and time again that if they can get away with something illicit or illegal, they will try.)

So what does all of this have to do with mental health?

Well, what’s the cost effectiveness of a year’s worth of psychotherapy? Or medication? Is a family trying to manage its expenses better off getting one over the other, or both if they can afford it?

That’s what Marisa Elena Domino, at the Department of Health Policy and Administration at the University of North Carolina at Chapel Hill, and her colleagues set out to examine in a recently published study in the American Journal of Psychiatry.

They examined the cost effectiveness of four different types of treatments for teenagers with depression — good ol’ Prozac, cognitive-behavioral psychotherapy (CBT), Prozac + CBT, or placebo (a sugar pill). The researchers expressed their results in cost per quality-adjusted life year (QALY).

QALY is a method to determine cost-effectiveness of a treatment. It requires a single measure of health-related quality of life that reflects both health gains and health losses due to side effects. The U.S. Public Health Service Task Force on Cost-Effectiveness in Health and Medicine specifically recommended that health states be expressed as QALY ratings, in which a year of life is rated on a cardinal scale from 0 (worst possible health) to 1 (perfect health). Therefore, increasing one’s QALY can be assigned a specific cost based upon the improvements found on the qualitative measure the study used — the Children’s Depression Rating Scale-Revised.

The results?

  • Placebo = Free, but not very effective
  • Prozac alone = $24,000 per QALY
  • Prozac + CBT = $123,000 per QALY
  • CBT alone = ??

The researchers couldn’t tell you the QALY cost for cognitive-behavioral therapy alone because they found “negative clinical effects.” In other words, the researchers found that people in the CBT actually worsened on the depression scale. Oops.

Of course, with any study of this nature, the devil is in the details. This study was done on teens, not adults, who react differently to different types of treatments. Teens have a lot of stuff going on in their heads and lives and CBT may not be an ideal treatment fit. Poorly trained CBT therapists also tend to have worse outcomes than experienced CBT therapists, and while researchers try their best to minimize individual therapist differences, they do exist.

Nonetheless, this sort of analysis sheds some light on why insurance companies make the decisions that they do. If they can help improve their customers’ lives for a fraction of the cost, why not do it?


Domino, M.E., Burns, B.J., Silva, S.G., Kratochvil, C.J., Vitiello, B., Reinecke, M.A., Mario, J. & March, J.S. (2008). Cost-Effectiveness of Treatments for Adolescent Depression: Results From TADS. Am J Psychiatry, 10, 1176.